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What's Next For Hospitality?

What's Next For Hospitality?

by Luke Butler

Image 2020 12 09 T21 52 49

While many COVID restrictions are now easing across Australia, the hospitality industry is still operating in a ‘bubble’ – albeit a more transparent one. New conditions are offering us all tentative feelings of relief.

Ironically, while venues maintain a reduced capacity, many are actually recording better trading results than last year. Restrictions have kept consumer demand more in-sync with the supply of available seating and venue capacities.

The advent of JobKeeper has also helped reinforce this by delivering the economic stimulus it was intended to provide and putting more disposable cash into the marketplace.

As restrictions continue to ease, capacity is lifting, although I don’t believe demand will lift at the same rate – especially in CBD venues which continue to lag behind more local alternatives. Simply because venues have the ability to now lift capacity does not mean consumer demand will match this.

Effective marketing is going to be increasingly important to secure market share, however many operators have understandably not been focusing on this discipline for some time. A number of marketing positions have been made redundant over the past year. Operators will now be required to employ new marketing people, armed with creative and novel strategies.

Consumers have changed – perhaps forever. New messages will need to be created to reflect this evolving mindset and tap into their key motivations.

And as we return to post COVID normality, these needs will become more evident. JobKeeper will end, reducing consumer spending power and exposing businesses to a further reduction in demand, placing even more pressure on the requirement for cut-through marketing.

It has never been more important.

Operators will need to resist the age-old trap of basing their marketing on price led strategies – these just result in a self-destructive race to the bottom. Price can certainly be a component of the marketing mix, but never the central focus.

While clever operators will avoid returning to the bad old days of discounting, I fear that this temptation could prove too much for some.